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Organizational Systems: What Leaders Need to Know

Ask 1,500 CEOs what the greatest challenge their organizations face is and they’ll tell you it's complexity.

We live in an increasingly volatile and uncertain world and leaders from every sector fear they are ill-equipped to meet the challenge.

Frank Kern, senior vice president, IBM Global Business Services noted that the findings of their 2010 CEO survey reflect the reality that “the biggest challenge facing enterprises from here on will be the accelerating complexity and the velocity of a world that is operating as a massively interconnected system."

When organizations fail we all feel the consequences: organizational systems failures have polluted our oceans and tainted our food, shaken the financial system and cut the roots of employment.

The problem isn’t that these things have happened, it’s that until we find a better way to manage the complexity of the 21st century, they will keep happening. The infrastructure that supported us in the 20th century is crumpling rapidly.

Every crisis also creates opportunity and we believe this one calls us to bring transformative learning theory and practice to support leaders in meeting the challenge of increasing interdependence and complexity.

The CEO’s in the IBM study saw the need to work with ambiguity in ways that engage creativity and support innovation. Our belief is that leaders who understand the nature of transformative learning will stop focusing on discredited controls and instead embrace creative collaboration—the lifeblood of truly 21st century organizations.

We don’t just believe it: we’ve seen it in action.

We talked to leaders

Thus far we at Saybrook have talked with leaders in business, government, healthcare, and non-profit organizations. We sought a diverse group of leaders and reached out to people we knew could provide insight into this challenge and opportunity. These were people in director level and above positions, in organizations that have a variety of challenges and opportunities, who rely on their working relationships to support their effectiveness as leaders. Participants included five CEOs from high-tech start up, global purchasing, software development, economic development, and public agencies; Director of Women and Children’s Services in a major public hospital; Risk Manager for a major bank; Talent Director for a global manufacturing company; Operations VP for a high-tech manufacturing company, and others. These are women and men between the ages of 30-65 who represent a mix of cultural backgrounds.

What they told us

These leaders had varying degrees of understanding of complexity, systems, transformative learning, and organizational transformation theory – but they all shared an awareness that they were working in social and organizational systems that required them to make connections between different organizational and social systems that conventional management techniques had not prepared them for. In all cases, they associated a greater ability to work with complexity with a greater effectiveness as a leader.

Many of these leaders described their experience in working within complexity as both stressful due to the many pressures and challenges, and also exhilarating. Many described the reality of working within a space of ambiguity where they were not sure what they might encounter at any given moment. One leader noted that “you need to be ready to be thrown into an urgent situation at any moment” and stressed the importance of helping people prepare to be effective in those unplanned situations.

Some leaders were clearly not thriving on the complexity they were experiencing and described the need to cope. Organizational culture which supports leaders in making changes in the way they work makes a significant difference in their ability to succeed in this complexity environment.

What they are doing differently:

Strengthening their relationships to both support others in working in this complex environment and to gain the support they need to ensure their leadership effectiveness.

Making better connections between people and technology.

Helping people see that they are working within systems and how their work is interrelated to the work of others

Encouraging more voices with diverse perspectives and helping people work with difference

Supporting people in examining their own assumptions and helping them learn from different points of view

Coaching and supporting people to take risks and learn from mistakes

Communicate constantly so that others understand the challenges and opportunities of working in a more complex environment.